FCA to scrutinise how firms handle PPI complaints process

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FCA chief executive Martin Wheatley (Source: Getty)

The Financial Conduct Authority (FCA) has its sights set on a new target - the handling of complaints on payment protection insurance (PPI).

The City regulator will investigate whether banks are taking the necessary measures to secure “appropriate protection for consumers” and will reveal its findings in the summer.

In August last year the FCA ordered more than 2.5m claims to be re-examined to ensure compensation for mis-sold PPI was “fairly made”.

The regulator has recommended any consumers who believe they were mis-sold PPI should pester the firm as much as possible with their complaints and contact the Financial Ombudsman Service if they are not satisfied with the response.

Banks such as Lloyd's, RBS and HSBC have set aside hundreds of millions in provisions to cover costs.

An official statement said:

The FCA will use this evidence to assess whether the current approach is continuing to meet its objectives of securing appropriate protection for consumers and enhancing the integrity of the UK’s financial system.

The FCA will then consider whether further interventions may be appropriate - which could include a consumer communication campaign; a possible time limit on complaints; or other rule changes or guidance - or whether the continuation of the PPI scheme in its current form best meets its objectives.